Health Administration Salary

According to a May 2014 New York Times article, the top earners in the medical industry are not medical doctors, but the professionals that oversee the business of medicine. In fact, the base pay of insurance executives, hospital executives, and hospital administrators surpasses physician salaries across the board.

An analysis performed by Compdata Surveys and published in the New York Times piece revealed that insurance chief executive officers (CEOs) earned a base pay of $584,000, followed by hospital CEOs at $386,000, and hospital administrators at $237,000.

And these numbers do not even begin to reveal total compensation for these executives, as most top executives earn the bulk of their income in non-salary compensation. For example, the chief executive of Aetna earned a salary of about $977,000 in 2012; however, his compensation packaged totaled more than $36 million, thanks to vested stocks and options. Similarly, the former president of Barnabas Health, a health system in New Jersey, earned a salary of just $28,000 in 2012, but his total compensation that year was nearly $22 million.

These generous compensation packages are offered to attract and retain top-performing executives with the expertise necessary to effectively manage hospital systems and medical facilities within the increasingly complex U.S. healthcare system.

Salary Trends and Statistics for Professionals in Healthcare Administration

A number of recent surveys reveal what many already know: salaries for healthcare administration professionals continue to grow along with the demands placed on them to perform in increasingly sophisticated systems:

A 2015 article by Becker’s Hospital Review revealed that professionals in healthcare administration enjoy top salaries. Here’s what they found:

The average base salary for an independent health system CEO was $752,800 in 2014.

The average base salary for an independent health system chief financial officer (CFO) was $247,900 in 2014.

The average, annual salary for a chief information officer (CIO) in healthcare and medical services was $173,941 in 2015.

The average, annual salary for a chief experience officer (CXO) was $221,000 in 2015.

The 2013 National Healthcare Leadership Compensation Survey, conducted by Integrated Healthcare Strategies and the American Society for Healthcare Human Resources Administration, revealed that about 80 percent of systems and hospitals offer short-term (annual) incentives for professionals in healthcare administration in the form of bonuses and incentives.

An executive compensation survey from Modern Healthcare found that many executives in some of the top-paying positions saw large salary increases in 2015, driven largely by bonus packages tied to improved quality and financial performance. According to the Modern Healthcare survey, the average compensation package for CEOs was $1.2 million in 2015, an increase of 8.2 percent over 2014.

Just a few of the healthcare administration professionals to see large increases to their compensation packages were:

Chief operating officers: 7.8 percent

Chief financial officers: 8.4 percent

Chief medical officers: 6.4 percent

Chief nursing officers: 7.7 percent

The survey also revealed that total cash compensation for all healthcare administration job titles increased 6.3 percent in 2015. One of the major reasons for these large increases is the growing complexity of the challenges top leaders face at the system level.

Just a few of the contemporary challenges facing hospital administrators and similar healthcare administration professionals include:

The consolidation of hospitals and hospital systems

Mergers and acquisitions

Pressure to improve quality amid declining reimbursement

Implementation of government mandated health care

A shortage of qualified medical professionals

According to Sullivan Cotter’s Manager and Executive Compensation in Hospitals and Health Systems Survey, the following executives at healthcare systems saw the largest increases in average, total cash compensation between 2014 and 2015:

Clinical research executive

Mission services executive

Managed-care executive

Revenue-cycle executive

Chief financial officer

The survey also found that the following hospital executives saw the largest increases in average, total cash compensation between 2014 and 2015:

Chief nursing officer

Business development executive

Human resources executive

President and CEO (system-owned hospital)

Chief information officer

Chief operating officer (system-owned hospital)

Incentive packages for healthcare and hospital administrators continue to depend on quality, safety, patient satisfaction, employee and physician engagement, and the financial performance of the organization. The survey also found that many boards are utilizing long-term incentive plans due to the ambitious benchmarks executives are expected to meet.

Department of Labor Salary Trends for Professionals in Healthcare Administration

The U.S. Department of Labor, Bureau of Labor Statistics (BLS), the principal fact-finding agency for the U.S. federal government in labor economics and statistics, detailed salary trends for medical and health services managers, as of May 2014.

The BLS found that the average, annual salary for medical and health services managers was $103,680, with the top 10 percent earning more than $161,150. The top-paying industries for medical and health services managers during this period were: